STMicro Singapore Layoffs

Asia One reports,

More than 6,000 employees of European semiconductor giant STMicroelectonics in Singapore will soon learn if they are to be hit by the company's plans to retrench some 10 percent of its 45,000-strong global workforce this year.

The company is grappling with dwindling tech spending worldwide.

A company spokesman told The Straits Times yesterday there are more than 6,000 workers in Singapore, but said it was "premature" to comment on the impact, if any, of the proposed job cuts.

STMicroelectronics' Singapore operations include the company's first Asian wafer fabrication plant in Ang Mo Kio which generates about 45 percent of its worldwide production. Singapore is also the site of the company's regional headquarters as well as its Asia-Pacific Design Centre.

However, the scale of the jobs cut in Singapore may be less than would have been the case if earlier plans had been implemented.

Last November, STMicroelectronics had said it wanted to shift more production to Asia, including places such as China and Singapore. It had said its production facilities were to be cut from 25 to 15, with the bulk of higher-cost factories in the West making way for increased production in Asia.

The move was designed to place additional work with the manufacturing hub here. Less than three months later, these plans seem to be on hold.

On the sidelines of a briefing yesterday, chief operating officer Alain Dutheil told Reuters: "What is new is that originally the idea was to cut capacity in high-cost areas like the US and transfer capacity to Asia. Today we re cutting the capacity in the US but we are not transferring this capacity to Asia."

The Switzerland-based company, which ranks fifth among global chipmakers, said the projected job cuts -3,500 in manufacturing and 1,000 in other departments - are aimed at cutting about US$700 million (S$1 billion) of costs.

On Tuesday, STMicroelectronics reported a fourth-quarter net loss of US$366 million last year, a marked deterioration on the US$20 million profit during the same period in 2007. The company's loses worsened last year with a net loss of US$786 million, compared to one of US$477 million in 2007.

It reported that net forth-quarter revenues fell 17 percent to US$2.28 billion with full-year net revenues at US$9.84 billion. STMicroelectonics also slashed its capital investment by 50 percent from last year to US$500 million this year.